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BNP Paribas Shares Fall as Quarterly Profit Misses Estimates

BNP Paribas SA shares dropped the most since June after France’s largest bank posted earnings that fell short of estimates and cast doubt over growth in its home market.

The bank tumbled as much as 5 percent in Paris trading after reporting fourth-quarter net income of 1.44 billion euros ($1.54 billion), below the 1.63 billion-euro average estimate of seven analysts surveyed by Bloomberg. Earnings at the French consumer-banking unit slumped, while fixed-income trading rose less analysts forecast.

Record-low interest rates and sluggish economic growth have held back consumer-banking profits at BNP Paribas and European peers. The bank, led by Chief Executive Officer Jean-Laurent Bonnafe, said it will spend 3 billion euros over the next three years to upgrade digital-banking services and increase automation, while also seeking to squeeze out 3.4 billion euros in costs companywide. It set a target for return on equity of 10 percent for 2020 — matching its 2016 goal.

“The new targets are rather uninspiring and maybe leave the door open to do better,” said Karim Bertoni, who helps manage 7.9 billion Swiss francs ($7.9 billion) at Bellevue Asset Management in Switzerland. In the fourth quarter, BNP “fared well, but there was nothing shining.”

BNP Paribas’s stock fell 4.1 percent to 57.53 euros by 4:52 p.m. in Paris trading, leading French banking rivals lower. Societe Generale SA slumped 2.7 percent, while Credit Agricole SA slid 2.2 percent.